Market report: Fracking go-ahead boosts British onshore oil drillers

Investors cashed in as the Government kick-started the UK’s fracking revolution by giving the green light to Cuadrilla’s plans to drill for shale gas in Lancashire.

Privately owned Cuadrilla was waiting for approval on applications to drill at two sites near Blackpool, having had its plans rejected by the county council last year amid protests over the use of the controversial extraction technique.

Cuadrilla appealed the ruling, but Communities Secretary Sajid Javid gave the go-ahead to one of the sites today and indicated that he would likely approve the second, which has been deferred while consultations continue on traffic.

Shares in exploration minnow IGas Energy were already up in anticipation, but soared 4p or 33% to 16p when the decision was confirmed.

Other UK onshore oil explorers with shale gas ambitions also jumped. Europa Oil & Gas was up 0.5p or 11% to 5.25p and Egdon Resources raced 2.38p or 13% higher to 20p. UK Oil & Gas, the firm behind the Gatwick Gusher well, rose 0.09p or 5% to 1.89p.

The wider market continued to lose the momentum that saw it close to breaking new highs as the FTSE 100 drifted down 12.21 points to 7021.04.

Lower profit guidance from easyJet, off 76p at 927p, dragged airline shares down, including British Airways owner IAG, which lost 8.3p at 388.5p.

Aerospace and car parts engineer GKN, up 7.1p to 338.3p, flew to highs for the year as HSBC slapped a 395p target price on the company, which has been rumoured to have several suitors interested in buying it.

Aberdeen Asset Management slipped 6p or 1.7% to 342.6p as RBC downgraded to Underperform after a share price surge, partly inspired by a string of fund management takeovers.

Today, RBC admitted that having an Underperform rating was “risky” in a sector full of mergers, but said it did not expect Aberdeen to be involved in the action, especially since chief executive Martin Gilbert recently sold £5.3 million of shares.